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FIRST DATA CORP

10-K

Annual report pursuant to section 13 and 15(d)

Filed on 03/13/2008

Filed Period 12/31/2007

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FIRST DATA CORP 10-K Annual report pursuant to section 13 and 15(d) Filed on 03/13/2008 Filed Period 12/31/2007

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... file number 001-11073 FIRST DATA CORPORATION www.firstdata.com DELAWARE (State of incorporation) 47-0731996 (I.R.S. Employer Identification No.) 6200 SOUTH QUEBEC STREET, GREENWOOD VILLAGE, COLORADO 80111 (Address of principal executive offices) (Zip Code) Registrant's telephone number...

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...by affiliates of Kohlberg Kravis Roberts & Co. ("KKR"). Additional information on the above noted items is presented below. Merger On April 1, 2007, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with New Omaha Holdings L.P., a Delaware limited partnership ("Parent...

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... to take place by the end of 2008. Commercial Services Commercial Services provides merchant and debit network acquiring and processing, check verification, settlement and guarantee, and prepaid card services. The company provides these services to approximately 3.7 million merchant locations across...

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... acquiring and processing, debit network acquiring and processing, prepaid services and check verification, settlement and guarantee. Commercial Services businesses facilitate the acceptance of consumer transactions at the point of sale, whether it is a transaction at a physical merchant location...

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...typically act as a merchant referral source when the institution has an existing banking or other relationship. The Company provides transaction processing and related functions. Both partners may provide management, sales, marketing, and other administrative services. The alliance strategy could be...

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... from a merchant who has contracted with the Company, an alliance partner or a processing customer. When the merchant swipes the card through the POS terminal (which is often sold or leased, and serviced by the Company), the Company obtains authorization for the transaction from the card issuer...

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...cards provided by Money Network Financial, LLC, a First Data Company. The Money Network Payroll distribution service enables paperless pay options for employers as an alternative to paper checks for their employees. Check verification, settlement and guarantee services Check verification, settlement...

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... offering products and services that compete with the Company's products and services. Commercial Services Seasonality Commercial Services' revenues and earnings are impacted by the volume of consumer usage of credit cards, debit cards, gift cards and checks written at the point of sale. Commercial...

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... institution clients include a wide variety of banks, savings and loan associations, group service providers and credit unions. Services provided include, among other things, account maintenance, transaction authorizing and posting, fraud and risk management services and settlement. The Company...

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... POS terminal also participating in the STAR Network. Revenue related to the STAR Network and debit card issuing and processing services is derived from fees payable under contracts but are driven more by monetary transactions processed rather than by accounts on file. The Company provides services...

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... segment is comprised of Debit, credit, retail and prepaid card processing; Merchant acquiring and processing; ATM and POS processing, driving, acquiring and switching services; and Card processing software. First Data International revenues from external customers, operating profit, and assets...

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... substantially its entire international card processing services to the VisionPLUS platform. The Company also generates revenue from custom programming services for certain customers and from software licensing and maintenance fees from its VisionPLUS software. First Data International Pipeline The...

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... 24, 2007 includes accelerated vesting of stock options and restricted stock awards and units and transaction costs related to the merger of $265.2 million that were recognized in All Other and Corporate. The exclusion of these costs from the calculation would decrease Integrated Payment System...

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... these services consist of fees paid by clients, which generally are based on call volume, duration and the number of transactions. First Data Solutions serves financial institutions and debt and collection agencies by helping them locate, verify and identify individuals and businesses. Corporate...

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... and Governance Committee Charter, and Code of Conduct for Senior Financial Officers are available without charge through the "About", "Governance" portion of the Company's web site, listed above, or by writing to the attention of Investor Relations at the address listed above. Executive Officers of...

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...First Data Resources Australia Limited ("FDRA"), BWA Merchant Services Pty Limited ("BWAMS"), Omnipay, Limited, First Data Acquisition Corp., First Data Merchant Services Mexico, S. de R.L. de C.V., AIB Merchant Services, European Merchant Services, BNL Positivity, Merchant Solutions Private Limited...

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... consumers and the use of that information in connection with its check verification and guarantee services. The collection business within TeleCheck is subject to the Fair Debt Collection Practices Act and various similar state laws. FDRL has a license under the Consumer Credit Act to enable it to...

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... than the Directive and impose additional duties on companies regarding handling/transfer of personal data); the Australian Privacy Act of 1988; and the Personal Information Protection and Electronic Documents Act in Canada. Each of these laws restricts the collection, processing, storage, use...

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...the indentures governing the Company's senior notes, the senior PIK notes of First Data Holdings Inc., the agreements governing the Company's unsecured debt, including the indentures governing the exchange notes related thereto, and the Company's senior secured credit facilities contain restrictions...

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... or limit the Company's ability to provide transaction processing services to or through the Company's customers, could have an adverse effect on the Company's business, operating results and financial condition. Changes in card association and debit network fees or products could increase costs or...

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... potential clients in the Company's service areas, primarily in Financial Institution Services and Commercial Services. The Company's alliance strategy could be negatively impacted as a result of consolidations, especially where the banks involved are committed to their internal merchant processing...

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... act as a merchant referral source when the institution has an existing banking or other relationship. The Company provides transaction processing and related functions. Both alliance partners may provide management, sales, marketing, and other administrative services. The alliance structure allows...

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... social expectations of corporate fairness, could damage the Company's reputation or brands. There is also increasing scrutiny of a number of credit card practices, from which some of the Company's customers derive significant revenue, by the U.S. Congress and governmental agencies. For example, the...

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... number of key personnel that do not have employment agreements with the Company. In connection with the recent appointment of a new chief executive officer concurrent with the closing of the merger, changes have been and may continue to be made to the Company's senior management. The Company cannot...

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... the Company's software products and errors or delays in the Company's processing of electronic transactions could result in additional development costs; diversion of technical and other resources from the Company's other development efforts; loss of credibility with current or potential customers...

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... All Other and Corporate facilities include the Company's corporate offices in Greenwood Village, Colorado. The Company believes that its facilities are suitable and adequate for its current business; however, the Company periodically reviews its space requirements and may acquire new space to meet...

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... for alleging that the holding companies First Data Corporation, Bank One Corporation and JPMorgan Chase were liable. On July 21, 2005, Concord filed a motion for summary judgment seeking to foreclose claims arising after February 1, 2001-the date that Concord acquired the STAR network. On August 22...

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...the "Court") against the Company and its wholly owned subsidiaries First Data Merchant Services Corporation, TeleCheck Services, Inc. d/b/a Telecheck International, Inc., and Microbilt Corporation (subsequently merged into TASQ Technology, Inc.), (collectively, the "First Data Defendants"), alleging...

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... public trading market for the Company's common stock. The Company had one record holder of common stock on March 1, 2008, and no equity securities of the Company are authorized for issuance under any equity compensation plan. The Company paid a dividend each calendar quarter of $0.06 per share...

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... an Agreement and Plan of Merger (the "Merger Agreement") with New Omaha Holdings L.P., a Delaware limited partnership ("Parent"), and Omaha Acquisition Corporation, a Delaware corporation and a subsidiary of Parent ("Sub"). Parent is controlled by affiliates of Kohlberg Kravis Roberts & Co. ("KKR...

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.... International card accounts on file include bankcard and retail accounts. Domestic merchant transactions include acquired VISA and MasterCard credit and signature debit, PIN-debit, electronic benefits transactions ("EBT"), and processed-only or gateway customer transactions at the point of sale...

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... merchant transaction processing and acquiring services; credit, retail and debit card issuing and processing services; official check issuance; and check verification, settlement and guarantee services. During 2007, FDC operated in four business segments: First Data Commercial Services, First Data...

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... an Agreement and Plan of Merger (the "Merger Agreement") with New Omaha Holdings L.P., a Delaware limited partnership ("Parent"), and Omaha Acquisition Corporation, a Delaware corporation and a subsidiary of Parent ("Sub"). Parent is controlled by affiliates of Kohlberg Kravis Roberts & Co. ("KKR...

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... data analytics and decision management software provider. Intelligent Results is reported as part of All Other and Corporate. In March 2007, the Company acquired Instant Cash ServicesÂ® ("Instant Cash"), a debit card and ATM payment processing service provider for community banks, credit unions...

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... check and money order wind-down noted above. Spin-off of Western Union On September 29, 2006, the Company separated its Western Union money transfer business into an independent, publicly traded company through a spin-off of 100% of Western Union to FDC shareholders in a transaction intended...

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... in the "Transaction and processing service fees revenue" and "Equity earnings in affiliates" line items of the Consolidated Statements of Income. The Company also continues to expand its association with Independent Sales Organizations ("ISO") along with the merchant alliance program to sign-up new...

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...organizations offering credit cards, debit cards and retail private label cards to consumers and businesses to manage customer accounts. The output services business provides statement and letter printing and embossing and mailing services to clients processing accounts on the Company's platform, as...

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...funds pending settlement from the sales of official checks and money orders or fee revenue from check processing or other payment management services. As noted above, the Company is in the process of winding-down the official check and money order business. During 2007, funds pending settlement were...

Page 40
... retail private label cards to consumers and businesses to manage customer accounts. Payment solutions include check verification, settlement and guarantee services (including TeleCheck) and other payment options that support merchants and online retailers, businesses, and government agencies. The...

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... and software licensing and maintenance revenue in the First Data Financial Institution Services segment and in FDGS in All Other and Corporate. Reimbursable debit network fees, postage and other-Debit network fees from PIN-debit card transactions acquired from merchants are recorded gross with the...

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... ended December 31, 2007 (in millions) 2006 2005 Revenues: Transaction and processing service fees Investment income, net Product sales and other Reimbursable debit network fees, postage and other Expenses: Cost of services Cost of products sold Selling, general and administrative Reimbursable...

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... the 2007 predecessor period versus a net presentation against transaction and processing service fee revenue in 2006. The successor period had a significant increase in cost of services mostly due to the amortization of identifiable intangible assets recorded in purchase accounting from the merger...

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...employee related expenses. The 2007 periods did not have costs that were incurred in 2006 in connection with re-aligning the operating structure of the Company after the spin-off of Western Union. Selling, general and administrative expenses, as a percentage of transaction and processing service fee...

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... 2006 Activities Pretax Benefit (Charge) First Data Commercial Services First Data Financial Institution Services Integrated Payment Systems Predecessor Year ended December 31, 2006 First Data International All Other and Corporate Total (in millions) Restructuring charges Restructuring accrual...

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... of $2.7 million related to the settlement of a claim within All Other and Corporate. 2005 Activities Pretax Benefit (Charge) First Data Commercial Services First Data Financial Institution Services Integrated Payment Systems Predecessor Year ended December 31, 2005 First Data International All...

Page 47
... exchange loss related to the mark-to-market of the Company's existing intercompany loans and the euro-denominated debt issued in connection with the merger of approximately $25 million. Historically, intercompany loans were deemed to be of a longterm nature for which settlement was not planned...

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... a subsidiary of Holdings subsequent to the merger and a member of a new U.S. consolidated group for income tax purposes, the Company expects to be in a net operating loss position in the near term future. The Company anticipates being able to record an income tax benefit related to future operating...

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FIRST DATA CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Minority interest Most of the minority interest expense relates to the Company's consolidated merchant alliances. Minority interest was relatively consistent in 2007 and 2006. The...

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...First Data Commercial Services segment revenue in the 2007 predecessor and successor periods was favorably impacted most significantly by the merchant acquiring business, including equity earnings in affiliates and related services. Transaction volumes at existing clients and increased debit network...

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... 2006 2005 2007 2006 2006 vs. 2005 Acquiring revenue Prepaid revenue Processing revenue charged to unconsolidated merchant alliances Total transaction and processing service fees Equity earnings in affiliates Total transaction and processing service fees and equity earnings in affiliates $ 1,990...

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... check guarantee volumes. Product sales and other revenue Product sales and other revenue for the 2007 predecessor and successor periods was negatively impacted by decreased terminal sales. The 2007 predecessor period benefited from merchant portfolio sales and contract termination fees totaling...

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... period, the Company bought out a revenue sharing agreement as part of a new, larger relationship with Discover Financial Services LLC ("Discover") resulting in an expense charge in the 2007 predecessor period with most of this charge being recovered through increased processing fees in the...

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... First Data Financial Institution Services segment revenue in the 2007 predecessor and successor periods was favorably impacted most significantly by reimbursable postage revenue, acquisitions, growth of existing clients and contract termination fees while price compression and the net impact of new...

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FIRST DATA CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Transaction and processing service fee revenue Components of transaction and processing service fee revenue Pro Forma Successor Period from September 25 through December 31, 2007 ...

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... Company closed one facility in 2006. Product sales and other revenue Product sales and other revenue in the 2007 predecessor period was favorably impacted by the receipt of contract termination fees and both the predecessor and successor periods were favorably impacted by professional service fees...

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... revenue includes merchant acquiring and processing revenue, debit transaction revenue, POS/ATM transaction revenue, fees from switching services and monthly managed service fees for issued cards. The above noted acquisitions and impact of foreign exchange rate movements positively impacted the 2007...

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... the First Data Cono Sur acquisition while other contributors such as growth of existing merchant acquiring businesses as a result of increased volumes, increases in card accounts on file and the benefit from foreign exchange rate movements were partially offset by the negative net impact of new and...

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... Year ended December 31, 2007 Revenues: Transaction and processing service fees Investment income, net Product sales and other Reimbursable debit network fees, postage and other Expenses: Cost of services Cost of products sold Selling, general and administrative Reimbursable debit network fees...

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...; the reversal of merger transaction costs of $72.6 million; the reversal of costs associated with the accelerated vesting of equity awards of $89.9 million; and the reversal of amortization of prior year service costs and actuarial gains and losses related to defined benefit plans of $2.6 million...

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...prior year service costs and actuarial gains and losses related to defined benefit plans; adjustments to recognize expense resulting from the sponsor's management fee; and the reversal of merger transaction costs. (c) (d) (e) (f) Capital Resources and Liquidity The Company's sources of liquidity...

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... settlements, other, investment gains and losses, divestitures, debt repayment gain/(loss) and non-operating foreign exchange gains and losses, as well as undistributed earnings in affiliates, stock compensation and employee stock purchase plan ("ESPP") expense and gains on the sale of merchant...

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... Consolidated Financial Statements, the Company merged with an entity controlled by an affiliate of KKR on September 24, 2007. The $26 billion represents the use of cash to purchase the FDC shares from its shareholders as well as other related transaction costs. Current Year Acquisitions The Company...

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...marketable securities acquired in the merger and $42.5 million resulting from the sale and maturity of other investments held by the Company. Dividend Received from Discontinued Operations Immediately prior to the spin-off, Western Union transferred $2.5 billion in cash to FDC. Within several months...

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...the 2007 predecessor period related to sources of $75.0 million in distributions from certain strategic investments, proceeds from the sale of merchant portfolios and proceeds from the sale of investments as well as $48.6 million related to activity associated with the Company's First Financial Bank...

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... transaction date. In October 2007, $2.2 billion of the senior unsecured cash-pay term loan facility was repaid upon issuance of 9.875% senior unsecured cash-pay notes due 2015. Fees totaling $555.0 million associated with the merger have been capitalized as deferred financing costs and are reported...

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FIRST DATA CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Senior Secured Revolving Credit Facility and Senior Secured Term Loan Facility The Company entered into a $2.0 billion senior secured revolving credit facility with a term of six ...

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.... The terms of the senior notes require the Company to file a registration statement with the United States Securities and Exchange Commission (the "SEC") relating to an offer to exchange the notes and guarantees for publicly tradable notes and guarantees having substantially identical terms within...

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... Payment Systems Inc. The senior secured facilities contain a number of covenants that, among other things, restrict the Company's ability to incur additional indebtedness, create liens, enter into sale and leaseback transactions, engage in mergers or consolidations, sell or transfer assets...

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... adjustment (5) Official check and money order EBITDA (6) Cost of data center, technology and other savings initiatives (7) Western Union spin-off costs (8) Transaction related fees Purchase accounting (9) Sponsor's annual management fee Pre-acquisition EBITDA of acquired businesses (10) Adjusted...

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... represent equity funding from Holdings related to the merger. On September 24, 2007, Holdings sold $1.0 billion aggregate principal amount of 11.5% senior PIK notes due 2016 to GS Mezzanine Partners VI Fund, L.P. and the Goldman Sachs Group, Inc. This $1.0 billion, net of fees, was the source of...

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...was a result of a significant number of stock option exercises during the first quarter 2006. The difference between the cost of shares repurchased noted in the table above and the amount reflected in the Consolidated Statements of Cash Flows is due to timing of trade settlements. Cash Dividends The...

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... for the Company's spin-off of The Western Union Company. Significant non-cash transactions during 2005 included the Company awarding 550,000 shares of restricted stock to executive officers. As an integral part of FDC's official check business, FDC receives funds from instruments sold in advance...

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... Consolidated Balance Sheets. Timing of tax payments is dependent upon various factors which cannot be reasonably estimated at this time. Critical Accounting Policies Stock-Based Compensation Upon the September 24, 2007 close of the merger, the vesting of FDC stock options, restricted stock awards...

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FIRST DATA CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Reserve for Merchant Credit Losses and Check Guarantees With respect to the merchant acquiring business, the Company's merchant customers (or those of its unconsolidated alliances...

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... for contracts and conversion costs only occurs when management is satisfied that such costs are recoverable through future operations, contractual minimums and/or penalties in case of early termination. The Company develops software that is used in providing processing services to customers. To...

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...)" caption in the Consolidated Statements of Income. Transactions with Related Parties as defined by SFAS No. 57 A substantial portion of the Company's business within the Commercial Services segment and International segment is conducted through merchant alliances. Certain merchant alliances, as it...

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... revenues include processing fees charged to alliances accounted for under the equity method. The Company negotiated all agreements with the alliance banks. Therefore, all transactions between the Company and its alliances were conducted at arm's length; nevertheless, SFAS No. 57, "Related Party...

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... loss in earnings. The acquisition-related transaction and restructuring costs will no longer be included as part of the capitalized cost of the acquired entity but will be required to be accounted for separately in accordance with applicable generally accepted accounting principles in the U.S. SFAS...

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... timely, successful and cost-effective consolidation of the Company's processing platforms and data centers; (c) continued growth at rates approximating recent levels for card-based payment transactions and other product markets; (d) successful conversions under service contracts with major clients...

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FIRST DATA CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Variations from these assumptions or failure to achieve these objectives could cause actual results to differ from those projected in the forward-looking statements. The Company ...

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...as available-for-sale. Accordingly, they are carried on the Company's Consolidated Balance Sheets at fair market value. A portion of the Company's Integrated Payment Systems ("IPS") business involves the payment of commissions to selling agents of its official check and money order products and such...

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...Through its merchant alliances, the First Data Commercial Services segment holds an ownership interest in several competing merchant acquiring businesses while serving as the electronic processor for those businesses. In order to satisfy state and federal antitrust requirements, the Company actively...

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... 1, 2007 through September 24, 2007 and the years ended December 31, 2006 and 2005 Notes to Consolidated Financial Statements Schedules: Schedule II-Valuation and Qualifying Accounts All other schedules for First Data Corporation and subsidiaries have been omitted since the required information is...

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... balance sheet of First Data Corporation as of December 31, 2007, and the related consolidated statements of income, cash flows and stockholders' equity for the period from September 25, 2007 through December 31, 2007 (successor period) (collectively consolidated financial statements). Our audits...

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... (b): Transaction and processing service fees: Merchant services (c) Check services Card services Other services Investment income, net Product sales and other Reimbursable debit network fees, postage and other Expenses: Cost of services Cost of products sold Selling, general and administrative...

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FIRST DATA CORPORATION CONSOLIDATED BALANCE SHEETS Successor December 31, (in millions, except common stock share amounts) 2007 Predecessor 2006 ASSETS Cash and cash equivalents Settlement assets Accounts receivable, net of allowance for doubtful accounts of $21.7 (2007) and $29.0 (2006) Property ...

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...acquired Payments related to other businesses previously acquired Proceeds from dispositions, net of expenses paid Additions to property and equipment, net Payments to secure customer service contracts, including outlays for conversion and capitalized systems development costs Proceeds from the sale...

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FIRST DATA CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Accumulated Other Comprehensive Income (Loss) Treasury Stock Common Shares Paid-In Capital Shares Cost (in millions, except per share amounts) Total Comprehensive Income Retained Earnings Predecessor Balance, December 31, ...

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See Notes to Consolidated Financial Statements. 88

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... accounts for the entity under the equity method. As of December 31, 2007 and 2006, there were no greater-than-50%-owned affiliates whose financial statements were not consolidated. On September 24, 2007, the Company was acquired through a merger transaction by affiliates of Kohlberg Kravis Roberts...

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... transaction processing and acquiring; credit, retail and debit card issuing and processing; official check issuance; and check verification, settlement and guarantee services. On September 29, 2006, the Company separated its Western Union money transfer business into an independent, publicly traded...

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... is accounted for under the equity method, the Company's consolidated revenues include the processing fees charged to the alliance, as presented on the face of the Consolidated Statements of Income. Revenue from check verification, settlement and guarantee services is recognized at the time of sale...

Page 94
...proportionate share of the earnings or losses of the subsidiaries, net of dividends. Reserve for Merchant Credit Losses and Check Guarantees With respect to the merchant acquiring business, the Company's merchant customers (or those of its unconsolidated alliances) have the liability for any charges...

Page 95
FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The majority of the TeleCheck Services, Inc. ("TeleCheck") business involves the guarantee of checks received by merchants. If the check is returned, TeleCheck is required to purchase the check from the merchant at its...

Page 96
...associated revenue (transaction and processing service fees). Conversion costs are also amortized over the term of the contract but are recorded as an expense in "Cost of services" in the Consolidated Statements of Income. In connection with the allocation of the purchase price related to the merger...

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...31, 2007 and 2006, all of the above noted investments were classified as available-for-sale. Unrealized gains and losses on these investments are included as a separate component of OCI, net of any related tax effect. The Company also has investments in non-marketable equity securities for strategic...

Page 98
... 1, 2007, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with New Omaha Holdings L.P., a Delaware limited partnership ("Parent"), and Omaha Acquisition Corporation, a Delaware corporation and a subsidiary of Parent ("Sub"). Parent is controlled by affiliates of KKR...

Page 99
... credit facilities, new senior unsecured interim loan agreement, new senior subordinated interim loan agreement, and the equity investment of Holdings. The purchase price was approximately $26.5 billion including $179.3 million in capitalized transaction costs excluding assumed debt. The merger...

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FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Merger Related Restructuring Charges The Company has implemented an initial "100 day plan" to provide strategic direction for the Company under new leadership. The plan anticipates capturing efficiencies related to the...

Page 101
... Condensed Consolidated Statements of Income Twelve months ended December 31, 2007 (in millions) 2006 Revenues: Transaction and processing service fees Investment income, net Product sales and other Reimbursable debit network fees, postage and other Expenses: Cost of services Cost of products sold...

Page 102
...): Pretax Benefit (Charge) First Data Commercial Services First Data Financial Institution Services Integrated Payment Systems Predecessor period from January 1, 2007 to September 24, 2007 First Data International All Other and Corporate Totals Restructuring charges Restructuring accrual...

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FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2006 Associated with the realigning of the Company's operating structure related to shared service functions and global technology functions, including data centers, a Company initiative to reduce operating costs to ...

Page 104
... Assets Acquired Month Total (in millions) Cash 2007: Successor First Data Government Solutions ("FDGS") minority holder buyout Merchant Solutions Joint Venture Three other acquisitions and merchant portfolio acquisitions Predecessor Instant Cash ServicesÂ® ("Instant Cash") FundsXpress First Data...

Page 105
... CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2007 Acquisitions Predecessor In January 2007, the Company acquired Size Technologies, a provider of loyalty, stored value and transaction marketing solutions. Size Technologies is reported as part of the First Data Commercial...

Page 106
... Information System product company that develops advanced software for managing utility billing and customer care. Peace is reported as part of the First Data Financial Institution Services segment. In December 2006, the Company acquired First Data Cono Sur, a provider of card issuing and merchant...

Page 107
...-added network services, and terminal interface services to local merchants with focus on small and medium size customers. The Company acquired 100% of First Data Austria in November 2005. First Data Austria provides debit and credit card issuing and acquiring processing, as well as card network...

Page 108
... the processing capabilities and management expertise of the Company with the visibility and distribution channel of the bank. The joint ventures acquire credit and debit card transactions from merchants. The Company provides processing and other services to the joint ventures and charges fees to...

Page 109
FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) At December 31, 2007, there were nine affiliates accounted for under the equity method of accounting, comprised of five merchant alliances and four strategic investments in companies in related markets. The majority of...

Page 110
... from payment instrument sales (primarily official checks and financial institution money orders) and merchant services transactions. Certain merchant settlement assets that relate to settlement obligations accrued by the Company are held by partner banks to which the Company does not have...

Page 111
... DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) "Other assets" line item of the Consolidated Balance Sheets and include primarily equity securities. In addition, the Company has investments in nonmarketable equity securities and other investments that are carried at cost...

Page 112
... 10, a portion of the Company's long-term debt as of December 31, 2007 represents bridge financing ("bridge facilities") for which quoted market values do not exist. The fair market value of this bridge financing in the form of the senior unsecured cash-pay term loan facility was estimated using the...

Page 113
..., the Company terminated all of the associated interest rate swaps that qualified as fair value hedges of the investments upon sale of the related investments. As discussed in Note 2 and on September 24, 2007, the Company was acquired through a merger by an entity controlled by affiliates of KKR. As...

Page 114
FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Risk Management Objectives and Strategies The Company is exposed to various financial and market risks, including those related to changes in interest rates and foreign currency rates that exist as part of its ongoing ...

Page 115
...the cash flow hedges of the first $3.0 billion portion of the debt. The amount of losses in OCI as of December 31, 2007 related to the hedged transactions that is expected to be reclassified into the Consolidated Statements of Income during the 12 months ending December 31, 2008 is approximately $31...

Page 116
FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Fair Value Hedges As discussed above in Note 2 and in connection with the merger, the Company terminated the interest rate swaps associated with its debt in connection with the repurchase of the underlying debt. ...

Page 117
... predecessor period from January 1, 2007 through September 24, 2007 are less than current expense primarily due to increased tax benefits associated with the exercise of stock options recorded directly to equity resulting in a federal net operating loss carryback for a refund. Income tax payments of...

Page 118
FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Successor December 31, 2007 Predecessor 2006 Deferred tax assets related to: Reserves and other accrued expenses Pension obligations Employee related liabilities Unrealized securities and hedging (gain)/loss Net ...

Page 119
... related to the current period Decreases for settlements with taxing authorities Decreases due to the lapse of applicable statute of limitations Balance as of December 31, 2007 $ $ The unrecognized tax benefit is included in the "Accounts payable and other liabilities" line of the Consolidated...

Page 120
... outstanding against these lines of credit as of December 31, 2006. The Company has two credit facilities associated with First Data Polska (formerly POLCARD) which are periodically used to fund settlement activity. As of December 31, 2007, the facilities totaled approximately 210 million Polish...

Page 121
... loan facility was repaid upon issuance of 9.875% senior unsecured cash pay notes due 2015, as discussed more fully below. Fees totaling $555.0 million associated with the merger have been capitalized as deferred financing costs and are reported in the "Other assets" line of the Consolidated Balance...

Page 122
... election to pay interest for the senior secured term loan facility solely under option (a). In combination with the debt issuance, the Company designated as accounting hedges two five-year interest rate swaps related to the senior secured term loan facility with notional amounts of $2.0 billion and...

Page 123
... Payment Systems Inc. The senior secured facilities contain a number of covenants that, among other things, restrict the Company's ability to incur additional indebtedness, create liens, enter into sale and leaseback transactions, engage in mergers or consolidations, sell or transfer assets...

Page 124
FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) All obligations under the senior notes, senior unsecured term loan facilities and senior subordinated unsecured term loan facility are similarly guaranteed on a subordinated basis in accordance with their terms by each...

Page 125
FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Supplemental Balance Sheet Information Successor December 31, (in millions) 2007 Predecessor 2006 Accounts receivable: Customers Unconsolidated merchant alliances Interest and other receivables Less allowance for ...

Page 126
... the Company exchanged these Western Union notes for FDC debt (commercial paper) held by investment banks. Note 12: Related Party Transactions Merchant Alliances A substantial portion of the Company's business within the Commercial Services and First Data International segments are conducted through...

Page 127
... DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) In addition, pursuant to the Management Agreement, the Company paid KKR transaction fees of $260 million in 2007 for certain services provided in connection with the merger and related transactions. The Management Agreement...

Page 128
... alleging that the holding companies, First Data Corporation, Bank One Corporation and JPMorgan Chase, were liable. On July 21, 2005, Concord filed a motion for summary judgment seeking to foreclose claims arising after February 1, 2001- the date that Concord acquired the STAR Network. On August 22...

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FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Six purported class action lawsuits have been filed against the Company and its directors challenging the process by which the Company agreed to enter into the Merger Agreement. These lawsuits have been consolidated ...

Page 130
.... As a result of the merger, the Company no longer pays cash dividends. As a result of the spin-off, FDC recorded a net increase to retained earnings of $554.5 million which represented the distribution of the net liabilities and certain equity balances related to Western Union to shareholders. Such...

Page 131
...in purchase accounting for the merger. Other Stockholders' Equity Transactions In 2007, the Company accelerated vesting of all outstanding stock options, restricted stock awards and restricted stock units as a result of the merger transaction. For information regarding stock compensation plans refer...

Page 132
... 24, 2007 and the year ended December 31, 2006. Stockbased compensation expense is recognized in the "Cost of services" and "Selling, general and administrative" line items of the Consolidated Statements of Income. As discussed in Note 2, vesting of FDC stock options, restricted stock awards and...

Page 133
... periods which ended when the employees became retirement eligible. Compensation expense related to stock options was recognized over the requisite service period. The vesting of options was accelerated upon closing of the merger as noted above. In December 2005, the Company accelerated vesting...

Page 134
... 12 month average stock price divided by the annualized dividend amount. Expected term-The Company aggregated stock option awards into classes. For each class, the expected term was primarily based on the results of a study performed on the historical exercise and post-vesting employment termination...

Page 135
... on the number of shares currently held in treasury stock. Restricted Stock Awards and Restricted Stock Units The Company granted 3.7 million restricted stock awards and restricted stock units in 2007. During 2006, the Company implemented a new incentive compensation plan for certain employees which...

Page 136
... with these plans were transferred to a separate Western Union trust. The Company also has separate plans covering certain employees located in the United Kingdom, Greece and Germany. The United Kingdom Defined Benefit Plan is no longer offered to new employees; however, the Company is required...

Page 137
..., 2006 Change in benefit obligation Benefit obligation at beginning of period Service costs Interest costs Actuarial (gain)/loss Acquired benefit obligations Termination benefits (a) Benefits paid Plan participant contributions Foreign currency translation Benefit obligation at end of period Change...

Page 138
FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Amounts recorded in other comprehensive income represent unrecognized net gains and losses. The Company does not have prior year service costs or credits or net transition assets or obligations. The following table ...

Page 139
... (in millions) % of Total Plan Assets Plan Asset Holdings (b) FDC common stock (a) Bank of New York common stock (a) (b) The fair market value reflects the pre-spin-off value of FDC common stock. All related party plan asset investments were terminated in 2007. 4.7 $ 7.4 $ 0.2 0.3 0.04% 0.05...

Page 140
... December 31, 2007 (in millions) Totals Revenues: Transaction and processing service fees Investment income, net Product sales and other Reimbursable debit network fees, postage and other Equity earnings in affiliates (a) Interest income Total segment reporting revenues Internal revenue and pretax...

Page 141
... All Other Commercial Institution First Data Payment and Services Services International Systems Corporate Totals Revenues: Transaction and processing service fees Investment income, net Product sales and other Reimbursable debit network fees, postage and other Equity earnings in affiliates...

Page 142
... Commercial Institution First Data Payment and Services Services International Systems Corporate Predecessor Twelve months ended December 31, 2005 (in millions) Totals Revenues: Transaction and processing service fees Investment income, net Product sales and other Reimbursable debit network fees...

Page 143
...discussed in Note 2 and on September 24, 2007, the Company was acquired by affiliates of KKR and a new Chief Executive Officer ("CEO") was appointed. In connection with this change in leadership, changes were made to the Company's senior management and organization of the business. Beginning in 2008...

Page 144
... retail private label cards to consumers and businesses to manage customer accounts. Payment solutions include check verification, settlement and guarantee services (including TeleCheck) and other payment options that support merchants and online retailers, businesses, and government agencies. The...

Page 145
..., net of tax, and separately stated on the Consolidated Statements of Income, below (loss) income from continuing operations. As a result of the merger with Concord, the Company divested its 64% ownership of NYCE, an electronic funds transfer network, on July 30, 2004. The sale agreement of...

Page 146
.... Additionally, the Company and Western Union entered into various commercial service agreements which are long-term arrangements to provide ongoing services. In November 2006, the Company sold its subsidiary Taxware to ADP(R) Employer Services, a division of Automatic Data Processing, Inc. for...

Page 147
FIRST DATA CORPORATION SCHEDULE II-Valuation and Qualifying Accounts (dollars in millions) Additions Balance at Beginning of Period Charged to Costs Charged and to Other Expenses Accounts Balance at End of Period Description Deductions For the predecessor period from January 1, 2007 to September ...

Page 148
.... Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of December 31, 2007, to ensure that information the Company is required to disclose in reports that are filed or submitted under the...

Page 149
... of First Data Corporation as of December 31, 2007, and the related consolidated statements of income, cash flows and stockholders' equity for the period from September 25, 2007 through December 31, 2007 (successor period) and our report dated March 12, 2008 expressed an unqualified opinion thereon...

Page 150
ITEM 9B. OTHER INFORMATION On March 11, 2008, Kimberly S. Patmore announced that she was resigning from her position as Chief Financial Officer ("CFO") of the Company. She will continue as CFO until a successor is named. 148

Page 151
...and served as Senior Human Resources Officer, Corporate Center until December 2002. Edward A. Labry III has been a Senior Executive Vice President since February 2006 and President of First Data USA since September 2007. Mr. Labry served as the Company's President of Commercial Services from January...

Page 152
... for Senior Financial Officers which applies to its Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer. The Code is available on our web site at www.firstdata.com under "About", "Investor Relations", "Corporate Governance". Audit Committee Financial Expert The Company...

Page 153
... April 1, 2007, First Data Corporation entered into an Agreement and Plan of Merger with New Omaha Holdings L.P. and Omaha Acquisition Corporation. New Omaha Holdings L.P. (subsequently renamed First Data Holdings Inc.) and Omaha Acquisition Corporation are affiliates of Kohlberg Kravis Roberts & Co...

Page 154
... exist for executive officers. In order to promote and facilitate significant equity ownership by executive officers following the merger, the 2007 Stock Incentive Plan for Key Employees of First Data Corporation (the "2007 Equity Plan") was adopted by the Committee. The 2007 Equity Plan allows for...

Page 155
...Donnelley; 13) Cigna Corporation and 14) Bank of New York. First Data relies on available information disclosed in proxy statements of these companies in combination with generally available market compensation survey information. Not all of First Data's executive officers have exact counterparts in...

Page 156
... sets and overall value to the company. Another factor that may influence base salary levels is an executive's base salary level prior to employment by First Data and the level required to recruit the executive. In February 2007, the Committee reviewed executive officer base salaries in light of...

Page 157
... time to review company financial performance, and conduct individual performance reviews prior to determining award levels. Determination of 2007 Awards Target bonus levels for executive officers are established by the Committee based on the consideration of multiple factors including: First Data...

Page 158
... expanded role managing First Data's domestic business and his leadership of the successful integration of multiple lines of business into a single domestic business. Determination of 2008 Targets As part of the compensation review conducted by the post-merger Committee and the new CEO described in...

Page 159
... merger, the Committee adopted the 2007 Stock Incentive Plan for Key Employees of First Data Corporation (the "2007 Equity Plan") as the vehicle for providing equity-based compensation for executive officers. The 2007 Equity Plan allows for executive officers to purchase shares of restricted stock...

Page 160
... of the Company's executives with those of the Company's shareholders. The 2007 Equity Plan allows executives to invest in the Company by purchasing shares of restricted common stock. Purchased shares are then matched with stock options. In January 2008, the Committee approved option grants to...

Page 161
... financial planning benefit is comparable to what is offered by a majority of companies with whom we compete for talent. The Committee reviews the appropriateness of perquisites provided to executive officers on an annual basis. NON-QUALIFIED DEFERRED COMPENSATION First Data offered the Supplemental...

Page 162
... defined benefit plans. These plans are fully described in the narrative following the Pension Benefits Table. SEVERANCE AND CHANGE-IN-CONTROL AGREEMENTS In general, First Data does not enter into employment agreements with the Company's employees, including the Company's executive officers, except...

Page 163
... restrictive covenants which are structured to protect First Data from potential loss of customers or employees and the release of company confidential information. During 2007, several named executive officers became entitled to severance benefits under this policy, including Mr. Bailis, Mr. Dibble...

Page 164
... publicly traded. The Committee has not considered 162(m) deductibility limitations in the planning of 2008 compensation since they do not apply. DIRECTOR COMPENSATION Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) Fees Earned or Paid in Name Cash ($)(1) Stock Awards...

Page 165
... information on awards granted in 2007, see the Grant of Plan-Based Awards Table. Amounts include all compensation expense recognized in First Data's financial statements during 2007 in accordance with SFAS 123R with respect to all stock options awarded under the 1992 and 2002 First Data Corporation...

Page 166
... executive officer duties following September 24, 2007. (10) Ms. Patsley's last day of employment with First Data Corporation was December 31, 2007. Ms. Patsley did not perform executive officer duties following September 24, 2007. PERQUISITE AND PERSONAL BENEFITS Employee Stock Purchase Plan...

Page 167
... Future Payouts Under Equity Incentive Plan Awards Threshold Target ($) ($) Maximum ($) All Other Option Awards: Number of Securities Underlying Options (#) (2) Exercise or Base Price of Option Awards ($/Sh) Grant Date Fair Value of Stock and Option Awards ($) (3) Market Close Price ($/Sh...

Page 168
... party has provided notice to terminate the agreement. Non-Equity Incentive Plan Compensation Amounts listed under the "Non-Equity Incentive Plan Compensation" column, were determined by the Compensation and Benefits Committee and were paid prior to March 15, 2008. Equity Awards The stock options...

Page 169
... of the named executive officers. This calculation is exclusive of Mr. Capellas who joined the Company in September 2007 and did not receive any incentive-based compensation during 2007. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END (1) Option Awards Equity Incentive Plan Awards: Number of Number of...

Page 170
... First Data ("FDC") equity awards were cancelled upon the merger. Western Union ("WU") equity awards were granted under the 1992 and/or 2002 First Data Corporation Long-Term Incentive Plans in connection with the spin-off of Western Union from First Data in September 2006. At that time, one option...

Page 171
... the First Data Corporation Retirement Plan, a tax-qualified plan; and the First Data Corporation Excess Benefit Retirement Plan, a non-qualified pension plan, which provides supplemental retirement and related benefits for a select group of management and highly compensated employees of the Company...

Page 172
...survivor annuity described above. First Data Corporation Excess Benefit Retirement Plan The Excess Benefit Retirement Plan covers employees of the Company who are participants in the Retirement Plan and whose Compensation exceeds the Internal Revenue Code Section 401(a)(17) limit with respect to any...

Page 173
... in the SISP on 4/1/2000 and SISP-2 on 1/1/2005. Prior to October 15, 2007, the Company offered an unfunded non-qualified deferred compensation plan called the SISP-2 to all director and above employees that earn an annual base salary of $95,000 or more a year. Participants were able to elect to...

Page 174
... are determined based on an assumed termination date of December 31, 2007 and the terms of the First Data Severance/Change in Control Policy effective September 24, 2007. Executive officers are eligible to receive benefits under this plan following three months of service and in the event of an...

Page 175
...Equity Compensation Plan Information The Company does not have any compensation plans under which the Company's common stock may be issued. First Data Holdings Inc., the Company's parent company, has adopted the 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates...

Page 176
... is c/o Kohlberg Kravis Roberts & Co. L.P., 9 West 57th Street, New York, New York 10019. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE ITEM 13. Policies Regarding the Approval of Transactions with Related Parties Under the Company's Director Code of Conduct, each...

Page 177
..., an executive officer of the Company, is the sole shareholder of The Labry Companies, Inc. and sole member of Plane Fish, LLC. On January 31, 2006, First Data Merchant Services Corporation, a wholly owned subsidiary of the Company, entered into a four year, eight month sublease agreement with The...

Page 178
... (i) owning or holding options to acquire Company common stock, (ii) service as an officer or employee of the Company or its subsidiaries that ended more than five years ago, (iii) any prior service as an interim Chief Executive Officer of the Company, (iv) employment or affiliation with the auditor...

Page 179
During 2007, all audit and non-audit services provided by Ernst & Young LLP were pre-approved by the Audit Committee of the Board of Directors or, consistent with the pre-approval policy of the Audit Committee, by the Chairperson of the Committee. 177

Page 180
... Western Union Company (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed on October 2, 2006, Commission File No. 1-11073). Agreement and Plan of Merger, dated as of April 1, 2007, among New Omaha Holdings L.P., Omaha Acquisition Corporation and First Data...

Page 181
... 10.2 of the Company's Current Report on Form 8-K filed September 28, 2007). Senior Subordinated Interim Loan Agreement, dated as of September 24, 2007, among First Data Corporation, the several lenders from time to time parties thereto, Citibank, N.A., as administrative agent, Credit Suisse, Cayman...

Page 182
... 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates (incorporated by reference to Exhibit 10.5 of the Registrant's Quarterly Report on Form 10-Q filed on November 14, 2007, Commission File No. 1-11073). * Form of Stock Option Agreement for Executive Committee...

Page 183
...the Sarbanes-Oxley Act of 2002. Filed herewith. Management contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item 15(b) of this report. The following financial statements are included in this annual report pursuant to Regulations S-X Rule 3-09: (1) Chase...

Page 184
Combined Financial Statements and Report of Independent Registered Public Accounting Firm for Chase Paymentech Including: December 31, 2007 December 31, 2006 December 31, 2005 (unaudited) 182

Page 185
...flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. As described in Note 1 to the combined financial statements, First Data Corporation (FDC) was acquired by Kohlberg, Kravis, Roberts & Co. in 2007, which resulted in a change in...

Page 186
... assets, net of accumulated amortization of $524,515 and $498,048 as of December 31, 2007 and 2006, respectively Other assets Total assets LIABILITIES AND EQUITY Current liabilities Liabilities related to merchant processing Accounts payable Payables to related parties Merchant deposits Accrued...

Page 187
...the years ended (In thousands) December 31, 2007 2006 2005 (unaudited) Revenue Expenses Operating Salaries and employee benefits Depreciation and amortization Total expenses Operating income Other income (expense), net Interest and other income Interest expense Foreign currency exchange Total other...

Page 188
... COMBINED STATEMENTS OF CHANGES IN OWNERS' EQUITY (In thousands) Corporations Accumulated Other Comprehensive Income Additional Paid-In Capital Partnerships and LLC's Partners' Capital and Members' Equity Total Common Stock Retained Earnings Balances at December 31, 2004 (unaudited) Net income...

Page 189
... a result of excess tax benefits relating to employee share-based awards Proceeds from issuance of common stock related to employee share-based awards Share repurchases related to employee share-based awards Payments on short-term financing Payments on long-term debt Operating cash attributed to the...

Page 190
... Entity Form of Entity Holding Companies FDC Offer Corp. Subsidiaries: Paymentech, Inc. Paymentech Management Resources, Inc. Paymentech Employee Resources LLC Chase Merchant Services, LLC Chase Paymentech - U.S. Operations Chase Paymentech Solutions, LLC Subsidiaries: Merchant-Link, LLC Paymentech...

Page 191
... in the electronic payment processing industry for businesses accepting credit, debit, fleet, and stored value card payments, as well as alternative methods of payment via point-of-sale, internet, catalog and recurring billings. The Company provides these services for transactions that originate...

Page 192
... Related to Merchant Processing Receivables related to merchant processing represent amounts due from card brands for transactions that have been processed. Marketable and other securities The Company has investments in marketable securities, as well as investments in non-marketable equity...

Page 193
... ended December 31, 2007 and 2006. Other Assets Other assets consist primarily of deferred charges, company-owned life insurance (COLI) policies held in trust for the Company's deferred compensation plan and deferred contract incentives. Deferred charges represent contributions for services paid...

Page 194
.... Revenue Revenue represents fees earned for processing credit and debit card transactions for merchants (including merchant discount fees), partially offset by interchange fees and debit network fees. Revenue also includes amounts earned from third party credit and debit authorization services...

Page 195
.... The new standard also requires expensing associated acquisition costs and restructuring charges. SFAS 141R is effective as of the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company plans to adopt the provisions of this statement prospectively for...

Page 196
... of products or services to present a chargeback. Management believes that the maximum exposure for its obligation at any time does not exceed the total amount of bankcard transactions processed for the preceding fourmonth period. For the four-month periods from September through December 2007, 2006...

Page 197
... as credit card numbers and personal consumer data, utilizing computer and telecommunications systems operated by the Company, its customers and outside third party providers. Despite internal controls and card brand imposed data security rules, which are in place to protect this information, ever...

Page 198
... and purchased merchant portfolios and other intangible assets. If, upon review, such revision of useful life is necessary, the remaining unamortized cost would be amortized over the revised useful life. In performing these reviews, the Company takes into account all currently available data. As...

Page 199
...rate. NOTE 9 - MARKETABLE AND OTHER SECURITIES The Company's investments include marketable securities classified as available-for-sale and carried at fair market value, as well as $2.8 million in nonmarketable equity securities at December 31, 2007 and 2006, accounted for under the cost method. The...

Page 200
...December 31, 2005 (unaudited) At December 31, 2006 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government obligations Government agency obligations Corporate obligations Mutual funds Total $ $ 6,052 $ 12,827 77,654 37,463 133,996 $ 13...

Page 201
..., and in each reporting period, an amount that offsets the hedged item's transaction gain or loss is reclassified to foreign currency exchange on the accompanying combined statements of income and comprehensive income. The net loss on derivatives for the years ended December 31, 2007, 2006, and 2005...

Page 202
...31, 2005 (unaudited) The components of the provision for income taxes are as follows (in thousands): For the years ended December 31, 2007 2006 2005 Current Federal income taxes State income taxes, net of U.S. federal income tax benefit Foreign income taxes Total Deferred Federal income taxes State...

Page 203
... of point-of-sale equipment for merchants in Canada. Financial information for the Company's operating segments is summarized as follows (in thousands): As of and for the year ended December 31, 2007 Corporate and eliminations U.S. Canada Combined Revenues: Transaction and processing services...

Page 204
...As of and for the year ended December 31, 2006 U.S. Canada Combined Revenues: Transaction and processing services Transaction and processing services - inter-segment Point-of-sale equipment and supplies Total segment reporting revenues Interest and other, net Depreciation and amortization Income...

Page 205
... year Service cost Interest cost Benefits paid Actuarial (gain)/loss Benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Employer contributions Benefits paid Fair value of plan assets at end of year Funded status $ 21...

Page 206
... for the years ended December 31, 2007, 2006, and 2005 is as follows (in thousands): Pension Plan 2007 2006 2005 Service cost Interest cost Expected return on plan assets Amortization of net actuarial loss Amortization of prior service cost Net periodic benefit cost Other changes in plan assets and...

Page 207
...an eligible employee's defined compensation are matched 50% by the Company. Salaries and employee benefits included $3.0 million, $2.2 million, and $1.7 million of expense relating to the Savings Plan on the combined statements of income and comprehensive income for the years ended December 31, 2007...

Page 208
...'s defined compensation are matched 50% by the Company. Salaries and employee benefits included $337 thousand, $300 thousand, and $262 thousand of expense relating to the Registered Savings Plan on the combined statements of income and comprehensive income for the years ended December 31, 2007, 2006...

Page 209
...a third party. When options are exercised, the Company issues new shares. Accelerated Vesting and Modifications The Stock Option Plan provides that, in the event of changes in equity securities by reason of change in capitalization, such as a reclassification, recapitalization, merger, consolidation...

Page 210
... as the provision of related services, such as chargeback management, fraud monitoring, collections, merchant settlement, payer authentication, multi-currency, customer service, and MasterCard sponsorship necessary to process Canadian MasterCard transactions. The negotiation and execution of revised...

Page 211
... services is included in revenue on the combined statements of income and comprehensive income. The related receivable is included in accounts receivable on the combined balance sheets. The Company entered into an employee lease arrangement under which FDC provided employees to work at the direction...

Page 212
... Banking and investment management services Customer referral program Transaction and related services, net Indemnification agreements Rent Transaction servicing and related services Point-of-sale equipment and supplies Debit interchange Employee lease arrangement Data transmission, authorization...

Page 213
...Relationship Revenue (expense), net JPMorgan Chase FDC Banking and investment management services Customer referral program Transaction and related services, net Rent Transaction servicing and related services Point-of-sale equipment and supplies Debit interchange Data transmission, authorization...

Page 214
Chase Paymentech NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED For the years ended December 31, 2007 and 2006 and the year ended December 31, 2005 (unaudited) LLC's All of the Company's LLCs are governed by Limited Liability Company Agreements, by and among their respective owner(s) (the ...

Page 215
...or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIRST DATA CORPORATION (Registrant) By: /s/ Michael D. Capellas Michael D. Capellas Chief Executive Officer and Chairman of the Board...

Page 216
... Western Union Company (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed on October 2, 2006, Commission File No. 1-11073). Agreement and Plan of Merger, dated as of April 1, 2007, among New Omaha Holdings L.P., Omaha Acquisition Corporation and First Data...

Page 217
... 10.2 of the Company's Current Report on Form 8-K filed September 28, 2007). Senior Subordinated Interim Loan Agreement, dated as of September 24, 2007, among First Data Corporation, the several lenders from time to time parties thereto, Citibank, N.A., as administrative agent, Credit Suisse, Cayman...

Page 218
... 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates (incorporated by reference to Exhibit 10.5 of the Registrant's Quarterly Report on Form 10-Q filed on November 14, 2007, Commission File No. 1-11073). * Form of Stock Option Agreement for Executive Committee...

Page 219
...of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed herewith. Management contracts and compensatory plans...

Page 220
... Corporation's issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time...

Page 221
... the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Corporation, these By-Laws or any contract or agreement to which the Corporation is a party, the act of...

Page 222
...or employee of the Corporation serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in...

Page 223
... under this Article V (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, or employee is proper in the circumstances because the person has met the applicable standard of conduct set...

Page 224
... or proceeding, had no reasonable cause to believe their conduct was unlawful" shall include, but not be limited to, actions based on the following information from the Corporation or other corporation, partnership, joint venture, trust, employee benefit plan, or enterprise to which the person is or...

Page 225
... at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provision of this Article V with respect to the resulting or...

Page 226
...Time Parties Hereto, CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent, Swingline Lender and Letter of Credit Issuer, CITIBANK, N.A., as Syndication Agent, and CREDIT SUISSE SECURITIES (USA) LLC, CITIGROUP GLOBAL MARKETS, INC., DEUTSCHE BANK SECURITIES INC., GOLDMAN SACHS CREDIT PARTNERS...

Page 227
... Interpretive Provisions Accounting Terms Rounding References to Agreements, Laws, Etc. Exchange Rates Amount and Terms of Credit Commitments Minimum Amount of Each Borrowing; Maximum Number of Borrowings Notice of Borrowing Disbursement of Funds Repayment of Loans; Evidence of Debt Conversions and...

Page 228
... Interest Conditions Precedent to Initial Borrowing Credit Documents Collateral Legal Opinions [Reserved] Equity Investments Closing Certificates Authorization of Proceedings of Each Credit Party Fees Representations and Warranties Solvency Certificate Merger Patriot Act Conditions Precedent to All...

Page 229
...Debt Payments and Amendments Limitations on Sale Leasebacks Changes in Business Consolidated Senior Secured Debt to Consolidated EBITDA Ratio Events of Default Payments Representations, Etc. Covenants Default Under Other Agreements Bankruptcy, Etc. ERISA Guarantee Pledge Agreement Security Agreement...

Page 230
... of Credit Mortgaged Properties Commitments and Addresses of Lenders Excluded Subsidiaries Debt Repayment Existing Hedge Banks Local Counsels Conflicts Litigation Subsidiaries Closing Date Affiliate Transactions Post-Closing Actions Closing Date Indebtedness Closing Date Liens Scheduled Dispositions...

Page 231
... Agreement Form of Security Agreement Form of Letter of Credit Request Form of Legal Opinion of Simpson Thacher & Bartlett LLP Form of Legal Opinion of General Counsel Form of Credit Party Closing Certificate Form of Assignment and Acceptance Form of Promissory Note (Initial Tranche B-1 Term Loans...

Page 232
... lenders from time to time parties thereto, Citibank, N.A., as administrative agent, Credit Suisse, Cayman Islands Branch, as syndication agent, and Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Credit Partners L.P., HSBC Securities...

Page 233
...to effect the Merger, to effect the Debt Repayments and to pay Transaction Expenses. Proceeds of Revolving Credit Loans and Swingline Loans will be used by the Borrower on or after the Original Closing Date for working capital general corporate purposes (including Permitted Acquisitions). Letters of...

Page 234
... pursuant to the Credit Documents shall continue unaltered to secure, guarantee, support and otherwise benefit the Obligations under the Original Credit Agreement of the Borrower and the other Credit Parties under this Agreement and each other Credit Document shall continue in full force and effect...

Page 235
... at any time the Total Term Loan Commitment less the Term Loan Commitments of all Defaulting Lenders. "Administrative Agent" shall mean Credit Suisse, as the administrative agent for the Lenders under this Agreement and the other Credit Documents, or any successor administrative agent pursuant to...

Page 236
... any other currency acceptable to the Administrative Agent that is freely convertible into Dollars and readily available in the London interbank market. "Amendment Effective Date" shall mean September 28, 2007. "Applicable ABR Margin" shall mean, at any date, with respect to each ABR Loan that is an...

Page 237
... and redemptions of Senior Notes, Senior Interim Loans, Senior Subordinated Notes, Senior Subordinated Interim Loans and Permitted Additional Debt pursuant to Section 10.7(a)(i)(2) following the Original Closing Date and prior to the Applicable Amount Reference Time. "Applicable LIBOR Margin" shall...

Page 238
...J to the Original Credit Agreement, or such other form as may be approved by the Administrative Agent. "Authorized Officer" shall mean the Chief Executive Officer, President, the Chief Financial Officer, the Treasurer, the Vice President-Finance or any other senior officer of the Borrower designated...

Page 239
... on a consolidated statement of cash flows of the Borrower and its Subsidiaries (including capitalized software expenditures, customer acquisition costs and incentive payments, conversion costs and contract acquisition costs). "Capital Lease" shall mean, as applied to any Person, any lease of any...

Page 240
... card, electronic funds transfer and other cash management arrangements. "Cash Management Bank" shall mean any Person that, either (x) at the time it enters into a Cash Management Agreement or (y) on the Original Closing Date, is a Lender or an Affiliate of a Lender, in its capacity as a party...

Page 241
...a Euro Tranche B-1 Term Loan Commitment, a Euro Tranche B-2 Term Loan Commitment or a New Term Loan Commitment. "Communications" shall have the meaning provided in Section 13.17(a). "Company" shall have the meaning provided in the preamble to this Agreement. "Confidential Information" shall have the...

Page 242
... costs, contract acquisition costs, and amortization of unrecognized prior service costs and actuarial gains and losses related to pension and other post-employment benefits, (iv) Non-Cash Charges, (v) business optimization expenses (including data center consolidation initiatives, severance costs...

Page 243
... unusual or non-recurring charges (including litigation and regulatory settlements, and spin-off costs relating to divestitures of subsidiaries, including without limitation from the spin-off of The Western Union Company), (xiii) to the extent included in Consolidated Net Income, the negative EBITDA...

Page 244
... the Administrative Agent, and (iv) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA for any period the Disposed EBITDA of any Person, property, business or asset sold, transferred, abandoned or otherwise disposed of, closed or classified...

Page 245
... Subsidiaries), as a result of the Transactions, any consummated acquisition whether consummated before or after the Original Closing Date, or the amortization or write-off of any amounts thereof. "Consolidated Senior Secured Debt" shall mean Consolidated Total Debt secured by a Lien on any...

Page 246
... listed on the balance sheet of any Joint Venture (excluding settlement assets) in an amount corresponding to the Borrower's or Restricted Subsidiaries', as applicable, proportionate share thereof, based on its ownership of such Joint Venture's Voting Stock. "Consolidated Total Debt to Consolidated...

Page 247
... Credit Agreement), the Guarantees, the Security Documents, each Letter of Credit and any promissory notes issued by the Borrower hereunder. "Credit Event" shall mean and include the making (but not the conversion or continuation) of a Loan and the issuance of a Letter of Credit. "Credit Facility...

Page 248
... and Acceptance pursuant to which such Lender assumed a portion of the Total Delayed Draw Term Loan Commitment, in each case as the same may be changed from time to time pursuant to the terms hereof. The aggregate amount of the Delayed Draw Term Loan Commitments as of the Original Closing Date...

Page 249
... faith as an "affiliate" by the Board of Directors of the Borrower, in each case pursuant to any stockholders' agreement, management equity plan or stock incentive plan or any other management or employee benefit plan or agreement shall not constitute Disqualified Equity Interests solely because it...

Page 250
... extent relating to human exposure to Hazardous Materials), or Hazardous Materials. "Equity Investments" shall have the meaning provided in the preamble to this Agreement. "Equity Offering" shall mean any public or private sale of common stock or Preferred Stock of the Borrower or any of its direct...

Page 251
...Original Closing Date, the amount specified as such Lender's "Euro Tranche B-1 Term Loan Commitment" in the Assignment and Acceptance pursuant to which such Lender assumed a portion of the Total Euro Tranche B-1 Term Loan Commitment, in each case as the same may be changed from time to time pursuant...

Page 252
... arriving at such Consolidated Net Income, (iii) decreases in Consolidated Working Capital for such period (other than any such decreases arising from acquisitions by the Borrower and the Restricted Subsidiaries completed during such period or the application of purchase accounting), (iv) an amount...

Page 253
... arriving at such Consolidated Net Income, (v) increases in Consolidated Working Capital for such period (other than any such increases arising from acquisitions by the Borrower and the Restricted Subsidiaries completed during such period or the application of purchase accounting), (vi) payments by...

Page 254
... than a Credit Party or whollyowned Subsidiary) to any contract, agreement, instrument or indenture governing such Stock or Stock Equivalents the right to terminate its obligations thereunder (other than customary non-assignment provisions which are ineffective under the Uniform Commercial Code or...

Page 255
... or taxing authority thereof or therein (other than any such connection arising from such Agent or Lender having executed, delivered or performed its obligations or received a payment under, or having been a party to or having enforced, this Agreement or any other Credit Document), (b) in the...

Page 256
... Loans shall have been repaid in full, September 24, 2013. "First Delayed Draw Repayment Date" shall mean March 31, 2009. "Foreign Asset Sale" shall have the meaning provided in Section 5.2(i). "Foreign Plan" shall mean any employee benefit plan, program, policy, arrangement or agreement maintained...

Page 257
...of the Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit B to the Original Credit Agreement, and (b) any other guarantee of the Obligations made by a Restricted Subsidiary that is a Domestic Subsidiary in form and substance reasonably acceptable to the...

Page 258
... 2005 and the audited consolidated statements of income, stockholders' equity and cash flows of the Borrower for each of the fiscal years in the three year period ending on December 31, 2006. "Holdings" shall mean New Omaha Holdings Corporation, a Delaware corporation, and its successors. "Increased...

Page 259
"Initial Investors" shall have Kohlberg Kravis Roberts & Co. L.P., KKR 2006 Fund L.P., Citigroup Global Markets Inc., Credit Suisse Management LLC, Deutsche Bank Investment Partners, Inc., HSBC Bank plc, LBI Group Inc., GMI Investments, Inc., Citigroup Capital Partners II 2007 Citigroup Investment ...

Page 260
... respect to any Term Loan or Revolving Credit Loan, the interest period applicable thereto, as determined pursuant to Section 2.9. "Investment" shall mean, for any Person: (a) the acquisition (whether for cash, property, services or securities or otherwise) of Stock, Stock Equivalents, bonds, notes...

Page 261
..." shall mean an agreement substantially in the form of Exhibit A to the Original Credit Agreement. "Joint Lead Arrangers and Bookrunners" shall mean Credit Suisse Securities (USA) LLC, Citigroup Global Markets, Inc., Deutsche Bank Securities Inc., Goldman Sachs Credit Partners L.P., HSBC Securities...

Page 262
... Lender having notified the Administrative Agent and/or the Borrower ...Credit Request" shall have the meaning provided in Section 3.2(a). "Level I Status" shall mean, on any date, the circumstance that neither Level II Status or Level III Status exists and the Consolidated Total Debt to Consolidated...

Page 263
... sale or other title retention agreement or any lease in the nature thereof). "Loan" shall mean any Revolving Credit Loan, Swingline Loan, Term Loan, New Revolving Loan or New Term Loan made by any Lender hereunder. "Management Investors" shall mean the directors, management officers and employees...

Page 264
... Acquisition and Processing Alliance" shall mean any joint venture or other strategic alliance entered into with any financial institution or other third party primarily entered into to offer Merchant Services. "Merchant Agreement" shall mean any contract entered into with a merchant relating...

Page 265
... the Total Revolving Credit Commitment at such date. "Multiemployer Plan" shall mean a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Net Cash Proceeds" shall mean, with respect to any Prepayment Event, (a) the gross cash proceeds (including payments from time to time...

Page 266
... related to intangible assets (including goodwill), long-lived assets, and investments in debt and equity securities pursuant to GAAP, (c) all losses from investments recorded using the equity method, (d) stock-based awards compensation expense, including any such charges arising from stock options...

Page 267
...have obligations under the Credit Documents) include the obligation (including guarantee obligations) to pay principal, interest, charges, expenses, fees, attorney costs, indemnities and other amounts payable by any Credit Party under any Credit Document. "Original Closing Date" shall mean September...

Page 268
...Pension Protection Act of 2006, as it presently exists or as it may be amended from time to time. "Perfection Certificate" shall mean a certificate of the Borrower in the form of Exhibit D to the Original Credit Agreement or any other form approved by the Administrative Agent. "Permitted Acquisition...

Page 269
... Permitted Additional Debt, if applicable) is an obligor. "Permitted Holders" shall mean the Sponsor, the Management Investors, the Initial Investors and each Person to whom any Initial Investor transfers Stock or Stock Equivalents of Holdings or any direct or indirect parent thereof in connection...

Page 270
... as a whole; (g) any interest or title of a lessor or secured by a lessor's interest under any lease permitted by this Agreement; (h) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; -39-

Page 271
... thereunder shall be pledged to the Secured Parties on a second priority basis to secure the Obligations pursuant to intercreditor arrangement reasonably acceptable to the Administrative Agent; (c) the remaining terms applicable to such financing facility must be customary for financings of such...

Page 272
... mean (a) the Pledge Agreement, entered into by the Credit Parties party thereto and the Collateral Agent for the benefit of the Secured Parties, substantially in the form of Exhibit E to the Original Credit Agreement, on the Original Closing Date, and (b) any other pledge agreement with respect to...

Page 273
... income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a sale, transfer or other disposition of all or substantially all Stock in any Subsidiary of the Borrower or any division, product line, or facility...

Page 274
... "Related Parties" shall mean, with respect to any specified Person, such Person's Affiliates and the directors, officers, employees, agents, trustees and advisors of such Person and any Person that possesses, directly or indirectly, the power to direct or cause the direction of the management or...

Page 275
... has been terminated at such time, a majority of the Revolving Credit Exposure (excluding Revolving Credit Exposure of Defaulting Lenders) at such time). "Requirement of Law" shall mean, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of...

Page 276
... Assignment and Acceptance pursuant to which such Lender assumed a portion of the Total Revolving Credit Commitment, in each case of the same may be changed from time to time pursuant to terms hereof. The aggregate amount of the Revolving Credit Commitment as of the Original Closing Date is $2,000...

Page 277
... party thereto and the Collateral Agent for the benefit of the Secured Parties, substantially in the form of Exhibit F to the Original Credit Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Security Documents" shall mean, collectively, (a) the Guarantee...

Page 278
... Closing Date to be issued in connection with the refinancing or exchange of the Senior Interim Loans in sales pursuant...recently ended Test Period, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio shall be no greater than 5.5 to 1.0. "Senior Subordinated Interim Loan Agreement...

Page 279
... in Section 2.14(a). "Settlement" shall mean the transfer of cash or other property with respect to any credit or debit card charge, check or other instrument, electronic funds transfer, or other type of paper-based or electronic payment, transfer, or charge transaction for which a Person acts...

Page 280
... Consolidated Total Debt to Consolidated EBITDA Ratio shall become effective as of the first day following each date that (a) Section 9.1 Financials for the first full fiscal quarter ended after the Original Closing Date are delivered to the Administrative Agent under Section 9.1 and (b) an officer...

Page 281
... the other Credit Documents. "TARGET Day" shall mean any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Administrative Agent to be...

Page 282
... mean the Initial Term Loans, the Delayed Draw Term Loans, the Euro Tranche Term Loans and any New Term Loans, collectively. "Test Period" shall mean, for any determination under this Agreement, the four consecutive fiscal quarters of the Borrower then last ended. "Total Credit Exposure" shall mean...

Page 283
... and the other Credit Documents and the transactions contemplated hereby and thereby. "Transactions" shall mean, collectively, the transactions contemplated by this Agreement, the Senior Interim Loan Agreement, the Senior Subordinated Interim Loan Agreement, the Merger and the Equity Investments and...

Page 284
...example and not limitation. (e) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form. (f) In the computation of periods of time from a specified...

Page 285
... any test or covenant contained in this Agreement with respect to any period during which any Specified Transaction occurs, the Consolidated Total Debt to Consolidated EBITDA Ratio, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio and the Senior Secured Leverage Test shall each be...

Page 286
... having a Revolving Credit Commitment severally agrees to make a loan or loans denominated in Dollars or any Alternative Currency (each a "Revolving Credit Loan" and, collectively, the "Revolving Credit Loans") to the Borrower, which Revolving Credit Loans (A) shall be made at any time and from -55...

Page 287
... disadvantageous to it and in the event of such request for costs for which compensation is provided under this Agreement, the provisions of Section 2.10 shall apply). On the Revolving Credit Maturity Date, all Revolving Credit Loans shall be repaid in full. (c) Subject to and upon the terms...

Page 288
... there be outstanding more than 30 Borrowings of LIBOR Loans under this Agreement. 2.3. Notice of Borrowing. (a) The Borrower gave the Administrative Agent at the Administrative Agent's Office (i) prior to 9:00 a.m. (New York City time) at least two Business Days' prior written notice (or telephonic...

Page 289
... Lender's proportionate share thereof and of the other matters covered by the related Notice of Borrowing. (b) Whenever the Borrower desires to incur Delayed Draw Term Loans, it shall give the Administrative Agent at the Administrative Agent's Office, (i) prior to 1:00 p.m. (New York City Time) at...

Page 290
... Swingline Lender written notice (or telephonic notice promptly confirmed in writing) with a copy to the Administrative Agent of each Borrowing of Swingline Loans prior to 2:30 p.m. (New York City time) on the date of such Borrowing. Each such notice shall specify (i) the aggregate principal amount...

Page 291
... to fulfill its commitments hereunder). 2.5. Repayment of Loans; Evidence of Debt. (a) The Borrower shall repay to the Administrative Agent, for the benefit of the applicable Lenders, (i) on the Initial Term Loan Maturity Date, the then-outstanding Initial Term Loans, in Dollars, and (ii) on the...

Page 292
... such Lender resulting from each Loan made by such lending office of such Lender from time to time, including the amounts of principal and interest payable and paid to such lending office of such Lender from time to time under this Agreement. (e) The Administrative Agent shall maintain the Register...

Page 293
... Term Loans and Revolving Credit Loans denominated in any Alternative Currency may not be converted to ABR Loans. Each such conversion or continuation shall be effected by the Borrower by giving the Administrative Agent at the Administrative Agent's Office prior to 1:00 p.m. (New York City time) at...

Page 294
... Lenders pro rata on the basis of their then-applicable Revolving Credit Commitment Percentages. Each Borrowing of New Term Loans under this Agreement shall be made by the Lenders pro rata on the basis of their then-applicable New Term Loan Commitments. It is understood that (a) no Lender shall be...

Page 295
... as, a Borrowing of LIBOR Loans in accordance with Section 2.6(a), the Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of the Borrower be...

Page 296
... (i) above, LIBOR Term Loans and LIBOR Revolving Credit Loans (other than the Euro Tranche Term Loans, which shall automatically continue as LIBOR Loans with Interest Periods of one month duration) shall no longer be available until such time as the Administrative Agent notifies the Borrower and the...

Page 297
... could have achieved but for such Change in Law (taking into consideration such Lender's or its parent's policies with respect to capital adequacy), then from time to time, promptly after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such...

Page 298
... 2.11 in connection with the New Loan Commitments, as applicable; and (v) the Borrower shall deliver or cause to be delivered any legal opinions or other documents reasonably requested by Administrative Agent in connection with any such transaction. Any New Term Loans made on an Increased Amount...

Page 299
... Initial Term Loans shall be reasonably acceptable to the Administrative Agent (as evidenced by its execution of the applicable Joinder Agreement). The terms and provisions of the New Revolving Loans and New Revolving Credit Commitments shall be identical to the Revolving Credit Loans and the...

Page 300
...any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Letter of Credit Issuer from issuing such Letter of Credit, or any law applicable to the Letter of Credit Issuer or any request or directive (whether or not having the force...

Page 301
... 1:00 p.m. (New York City time) at least two (or such lesser number as may be agreed upon by the Administrative Agent and the Letter of Credit Issuer) Business Days prior to the proposed date of issuance or amendment. Each notice shall be executed by the Borrower and shall be in the form of Exhibit...

Page 302
... last Business Day of each month, each Letter of Credit Issuer shall provide the Administrative Agent a list of all Letters of Credit (including any Existing Secured Letter of Credit) issued by it that are outstanding at such time. (f) The making of each Letter of Credit Request shall be deemed to...

Page 303
... date such amount is paid to the Administrative Agent for the account of the Letter of Credit Issuer at a rate per annum equal to the Overnight Rate from time to time then in effect, plus any administrative, processing or similar fees customarily charged by the Letter of Credit Issuer in connection...

Page 304
... to the Administrative Agent and the Administrative Agent shall promptly pay to each L/C Participant that has paid its Revolving Credit Commitment Percentage of such reimbursement obligation, in Dollars and in immediately available funds, an amount equal to such L/C Participant's share (based upon...

Page 305
...in the amount of its Revolving Credit Commitment Percentage of the applicable Unpaid Drawing by 2:00 p.m. (New York City time) on such Reimbursement Date by making the amount of such Revolving Credit Loan available to the Administrative Agent. Such Revolving Credit Loans shall be made without regard...

Page 306
... Authority, central bank or comparable agency charged with the interpretation or administration thereof, or actual compliance by the Letter of Credit Issuer or any L/C Participant with any request or directive made or adopted after the Original Closing Date (whether or not having the force of law...

Page 307
... or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the Letter of Credit Issuer, the Administrative Agent, any of their respective Affiliates nor any correspondent, participant or assignee of the Letter of...

Page 308
..., and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance, shall apply to each commercial Letter of Credit. 3.10. Conflict with Issuer Documents. In the event of any conflict between...

Page 309
...-month period (or portion thereof) ended on such day for which no payment has been received) (provided that, the first such payment shall be on December 31, 2007 and shall relate to the period from the Original Closing Date and ended on such date) and (y) on the Revolving Credit Termination Date...

Page 310
... with this Agreement, the aggregate amount of the Lenders' Revolving Credit Exposures shall not exceed the Total Revolving Credit Commitment. 4.3. Mandatory Termination of Commitments. (a) The Initial Term Loan Commitments terminated at 5:00 p.m. (New York City time) on the Original Closing Date...

Page 311
... provided in the applicable Joinder Agreement, terminate at 5:00 p.m. (New York City time) on the Increased Amount Date for such Series. SECTION 5. Payments 5.1. Voluntary Prepayments. (a) The Borrower shall have the right to prepay its Term Loans, Revolving Credit Loans and Swingline Loans, in each...

Page 312
... of any Term Loans shall be required under this Section 5.2(a)(ii) if the ratio of Consolidated Total Debt on the date of prepayment (prior to giving effect thereto and as certified by an Authorized Officer of the Borrower) to Consolidated EBITDA for the most recent Test Period ended prior to such...

Page 313
... in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.11. (e) Application to Revolving Credit Loans. With respect to each prepayment...

Page 314
... pro rata share of any mandatory prepayment (such declined amounts, the "Declined Proceeds") of Term Loans required to be made pursuant to Section 5.2(a) by providing written notice (each, a "Rejection Notice") to the Administrative Agent and the Borrower no later than 5:00 p.m. (New York time) one...

Page 315
... in such Credit Document, be made in Dollars. The Administrative Agent will thereafter cause to be distributed on the same day (if payment was actually received by the Administrative Agent prior to 2:00 p.m. (New York City time) or, otherwise, on the next Business Day) like funds relating to the...

Page 316
...the Borrower and is not a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Code)), (y) Internal Revenue Service Form W-8BEN or Form W-8ECI, in each case properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from...

Page 317
... 7701(a)(30) of the Code (each, a "U.S. Lender") shall, to the extent it can legally do so, deliver to the Borrower and the Administrative Agent two United States Internal Revenue Service Forms W-9 (or substitute or successor form), properly completed and duly executed, certifying that such Lender...

Page 318
... make such payment to the maximum extent permitted by or consistent with applicable laws, rules and regulations. (c) Adjustment if Any Payment Exceeds Lawful Rate. If any provision of this Agreement or any of the other Credit Documents would obligate the Borrower to make any payment of interest or...

Page 319
... listed on Schedule 6.3 to the Original Credit Agreement in form and substance satisfactory to the Administrative Agent. The Borrower, the other Credit Parties and the Administrative Agent hereby instruct such counsel to deliver such legal opinions. 6.4. [Reserved]. 6.5. Equity Investments. Equity...

Page 320
..., in form and substance satisfactory to the Administrative Agent, of the board of directors or other managers of each Credit Party (or a duly authorized committee thereof) authorizing (a) the execution, delivery and performance of the Credit Documents (and any agreements relating thereto) to...

Page 321
... of this Agreement and the making of the Loans and the issuance of the Letters of Credit (it being understood that the following representations and warranties shall be deemed made with respect to any Foreign Subsidiary only to the extent relevant under applicable law): 8.1. Corporate Status. The...

Page 322
... Party of the Credit Documents to which it is a party nor compliance with the terms and provisions thereof nor the consummation of the Merger and the other transactions contemplated hereby or thereby will (a) contravene any applicable provision of any material law, statute, rule, regulation, order...

Page 323
...) the Credit Documents) for purposes of or in connection with this Agreement or any transaction contemplated herein contained any untrue statement of any material fact or omitted to state any material fact necessary to make such information and data (taken as a whole) not misleading at such time in...

Page 324
... or in the aggregate, reasonably be expected to have a Material Adverse Effect. 8.12. Subsidiaries. Schedule 8.12 to the Original Credit Agreement lists each Subsidiary of the Borrower (and the direct and indirect ownership interest of the Borrower therein), in each case existing on the Original...

Page 325
...each Letter of Credit have terminated and the Loans and Unpaid Drawings, together with interest, Fees and all other Obligations incurred hereunder (other than contingent indemnity obligations), are paid in full: 9.1. Information Covenants. The Borrower will furnish to the Administrative Agent (which...

Page 326
... to each of the first three quarterly accounting periods in each fiscal year of the Borrower (or, if such financial statements are not required to be filed with the SEC, on or before the date that is 45 days after the end of each such quarterly accounting period), the consolidated balance sheets of...

Page 327
... owned or leased by any Credit Party, but excluding all operating fixtures and equipment, whether or not incorporated into improvements. (g) Other Information. Promptly upon filing thereof, copies of any filings (including on Form 10-K, 10-Q or 8-K) or registration statements with, and reports to...

Page 328
... financial information of the Borrower and the Restricted Subsidiaries by furnishing (A) the applicable financial statements of any direct or indirect parent of the Borrower or (B) the Borrower's (or any direct or indirect parent thereof), as applicable, Form 10-K or 10-Q, as applicable, filed with...

Page 329
... in such total amount as the Administrative Agent may from time to time reasonably require, if at any time the area in which any improvements located on any Mortgaged Property is designated a "flood hazard area" in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or...

Page 330
... extent permitted under Section 10, (f) employment and severance arrangements between the Borrower and the Subsidiaries and their respective officers, employees or consultants (including management and employee benefit plans or agreements, stock option plans and other compensatory arrangements) in...

Page 331
... as created by the Credit Parties on the Original Closing Date. 9.12. Pledge of Additional Stock and Evidence of Indebtedness. (a) Subject to any applicable limitations set forth in the Security Documents or with respect to which, in the reasonable judgment of the Administrative Agent (confirmed in...

Page 332
... a book value or fair market value in excess of $10,000,000 are acquired by the Borrower or any other Credit Party after the Original Closing Date (other than assets constituting Collateral under a Security Document that become subject to the Lien of the applicable Security Document upon acquisition...

Page 333
...Administrative Agent; (c) Indebtedness in respect of any bankers' acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities entered into in the ordinary course of business (including in respect of workers compensation claims, health, disability or other employee benefits...

Page 334
... reasonable amounts paid in respect of fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal or extension; (g) Indebtedness outstanding on the Original Closing Date listed on Schedule 10.1 to the Original Credit Agreement and any modification...

Page 335
... Acquisition; provided that (x) the Borrower or another Credit Party pledges the Stock and Stock Equivalents of such acquired Person to secure the Obligations to the extent required under Section 9.12, (y) such acquired Person executes a supplement to the applicable Guarantee and Security Documents...

Page 336
..., or such guarantee, respectively, shall be subordinated to the Obligations to substantially the same extent; (p) Indebtedness in respect of overdraft facilities, employee credit card programs, netting services, automated clearinghouse arrangements and other cash management and similar arrangements...

Page 337
... former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) to finance the purchase or redemption of Stock or Stock Equivalents of the Borrower (or any direct or indirect parent...

Page 338
... Credit Documents will be deemed at all times to have been incurred in reliance only on the exception in clause (a) of Section 10.1 and (ii) all Indebtedness outstanding under the Notes, the Senior Interim Loan Agreement and the Senior Subordinated Interim Loan Agreement will be deemed at all times...

Page 339
... Restricted Subsidiary that is not a Credit Party; (k) Liens (i) of a collecting bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of...

Page 340
... perfection and priority of the Liens under the applicable Security Documents and (y) if requested by the Administrative Agent, an opinion of counsel to the effect that such merger or consolidation does not violate this Agreement or any other Credit Document and that the provisions set forth in the...

Page 341
...) shall execute a supplement to the Guarantee Agreement and the relevant Security Documents in form and substance reasonably satisfactory to the Administrative Agent in order to become a Guarantor and pledgor, mortgagor and grantor, as applicable, thereunder for the benefit of the Secured Parties...

Page 342
...accounts receivable relate, for fair value, provided that (i) to the extent required, the Net Cash Proceeds thereof to the Borrower and the Restricted Subsidiaries are promptly applied to the prepayment of Term Loans as provided for in Section 5.2, (ii) after giving effect to any such sale, transfer...

Page 343
... make Dispositions of property pursuant to Permitted Sale Leaseback transactions; (h) the Borrower and the Restricted Subsidiaries may make Dispositions of Investments in joint ventures and Merchant Acquisition and Processing Alliances (regardless of the form of legal entity) to the extent required...

Page 344
...in connection with cash management arrangements by a Credit Party in a Subsidiary that is not a Credit Party is in the form of an intercompany loan or advance and the Borrower or such Restricted Subsidiary complies with Section 9.12 to the extent applicable), (ii) by Credit Parties in any Restricted...

Page 345
... Investments in Merchant Acquisition and Processing Alliances (regardless of the form of legal entity) and (iv) Investments in Subsidiaries that are not Credit Parties), in each case valued at the fair market value (determined by the Borrower acting in good faith) of such Investment at the time each...

Page 346
... Borrower and its Subsidiaries or any parent thereof, so long as such repurchase is pursuant to, and in accordance with the terms of, management and/or employee stock plans, stock subscription agreements or shareholder agreements or any other management or employee benefit plan or agreement; -115-

Page 347
... Subsidiary under this Agreement (including in respect of any initial public offering); (iii) the proceeds of which shall be used to pay franchise and excise taxes and other fees, taxes and expenses required to maintain the corporate existence of any direct or indirect parent of the Borrower...

Page 348
... of this Agreement; (h) the Borrower may declare and pay dividends on the Borrower's common stock following the first public offering of the Borrower's common stock or the common stock of any of its direct or indirect parents after the Original Closing Date, of up to 6% per annum of the net proceeds...

Page 349
... any Senior Notes, Senior Interim Loans, Senior Subordinated Notes, Senior Subordinated Interim Loans or Permitted Additional Debt to the extent that any such waiver, amendment, modification, termination or release would be adverse to the Lenders in any material respect. 10.8. Limitations on Sale...

Page 350
... on the Loans or any Fees or any Unpaid Drawings or of any other amounts owing hereunder or under any other Credit Document; or 11.2. Representations, Etc. Any representation, warranty or statement made or deemed made by any Credit Party herein or in any other Credit Document or any certificate...

Page 351
... full force or effect (other than pursuant to the terms hereof and thereof) or any such Guarantor thereunder or any other Credit Party shall deny or disaffirm in writing any such Guarantor's obligations under the Guarantee; or 11.8. Pledge Agreement. Any Pledge Agreement pursuant to which the Stock...

Page 352
... Obligations or the obligations of the Credit Parties under the Guarantee and the other Security Documents, as the case may be, as provided in the Senior Subordinated Notes Indenture, the Senior Subordinated Interim Loan Agreement or the instruments governing the terms of any such other Subordinated...

Page 353
... be applied: (i) first, to the payment of all reasonable and documented costs and expenses incurred by the Administrative Agent or Collateral Agent in connection with any collection or sale or otherwise in connection with any Credit Document, including all court costs and the reasonable fees and...

Page 354
... be entitled to all benefits of this Section 12. 12.2. Delegation of Duties. The Administrative Agent and the Collateral Agent may each execute any of its duties under this Agreement and the other Credit Documents by or through agents, sub-agents, employees or attorneys-in-fact and shall be entitled...

Page 355
....3. Exculpatory Provisions. No Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by any of them under or in connection with this Agreement or any other Credit Document (except for its...

Page 356
... officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent or Collateral Agent hereinafter taken, including any review of the affairs of the Borrower, any Guarantor or any other Credit Party...

Page 357
.... Each Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower, any Guarantor, and any other Credit Party as though such Agent were not an Agent hereunder and under the other Credit Documents. With respect to the Loans made by...

Page 358
... staff costs and any out of pocket expenses. 12.11. [Reserved]. 12.12. Agents Under Security Documents and Guarantee. Each Secured Party hereby further authorizes the Administrative Agent or Collateral Agent, as applicable, on behalf of and for the benefit of the Secured Parties, to be the agent...

Page 359
..., the Administrative Agent and/or the Collateral Agent may, from time to time, (a) enter into with the relevant Credit Party or Credit Parties written amendments, supplements or modifications hereto and to the other Credit Documents for the purpose of adding any provisions to this Agreement or the...

Page 360
... Tranche B-1 Term Loan Lenders", "Required Tranche B-2 Term Loan Lenders" consent to the assignment or transfer by the Borrower of its rights and obligations under any Credit Document to which it is a party (except as permitted pursuant to Section 10.3) or alter the order of application set forth in...

Page 361
... credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans and the Revolving Credit Loans...

Page 362
... to the applicable telephone number, as follows: (a) if to the Borrower, the Administrative Agent, the Collateral Agent, the Letter of Credit Issuer or the Swingline Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 13.2 to...

Page 363
... its own counsel), related to the Transactions (including, without limitation, the Merger) or, with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Credit Documents and any such other documents, including, without limitation, any of the...

Page 364
... Affiliate of the Letter of Credit Issuer that issues any Letter of Credit), Participants (to the extent provided in clause (c) of this Section 13.6) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Collateral Agent, the Letter of Credit...

Page 365
...by Affiliates of Lenders and related ...Loans; (C) The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance via an electronic settlement system reasonably acceptable to the Administrative Agent, together with a processing and recordation fee...

Page 366
... of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee's completed Administrative Questionnaire and applicable tax forms (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in clause (b) of...

Page 367
... credit evaluation of the Borrower and its Affiliates prior to becoming a party to this Agreement. (f) The words "execution", "signed", "signature", and words of like import in any Assignment and Acceptance shall be deemed to include electronic signatures or the keeping of records in electronic form...

Page 368
... of such SPV to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPV. This Section 13...

Page 369
... referred to herein or in the other Credit Documents. 13.12. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 13.13. Submission to Jurisdiction; Waivers. The...

Page 370
... the Original Credit Agreement at such other address of which the Administrative Agent shall have been notified pursuant to Section 13.2 to the Original Credit Agreement; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall...

Page 371
...ratings agency that requires access to information regarding the Credit Parties, the Loans and Credit Documents in connection with ratings issued with respect to a Securitization; provided that unless specifically prohibited by applicable law or court order, each Lender, the Administrative Agent and...

Page 372
... referred to herein collectively as "Communications"), by transmitting the Communications in an electronic/soft medium in a format reasonably acceptable to the Administrative Agent to the Administrative Agent at an email address provided by the Administrative Agent from time to time; provided that...

Page 373
... to the Borrower may be posted on that portion of the Platform designated for such public-side Lenders. If the Borrower has not indicated whether a document or notice delivered contains only publicly available information, the Administrative Agent shall post such document or notice solely on that...

Page 374
...from time to time in effect. 13.21. Acknowledgements Relating to the Amendment Effective Date. Each Credit Party hereby (i) expressly acknowledges the terms of this Agreement, (ii) ratifies and affirms its obligations under the Credit Documents (including guarantees and security agreements) executed...

Page 375
..., each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written. FIRST DATA CORPORATION, as Borrower By: /s/ Kimberly S. Patmore Name: Kimberly S. Patmore Title: Executive Vice President and Chief Financial Officer S-1

Page 376
CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent, Collateral Agent, Swingline Lender, Letter of Credit Issuer and a Lender By: /s/ William O'Daly Name: William O'Daly Title: Director By: /s/ Mikhail Faybusovich Name: Mikhail Faybusovich Title: Associate S-2

Page 377
CITIBANK N.A., as Syndication Agent and a Lender By: /s/ Caesar W. Wyszomirjki Name: Caesar W. Wyszomirjki Title: VP S-3

Page 378
CITIGROUP GLOBAL MARKETS, INC., as Joint Lead Arranger and Bookrunner By: /s/ Caesar W. Wyszomirjki Name: Caesar W. Wyszomirjki Title: Director S-4

Page 379
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as Lender By: /s/ Paul O'Leary Name: Paul O'Leary Title: Vice President By: /s/ Hans-Josef Thiele Name: Hans-Josef Thiele Title: Director S-5

Page 380
DEUTSCHE BANK SECURITIES INC., as Joint Lead Arranger and Bookrunner By: /s/ Keith Braun Name: Keith C. Braun Title: Director By: /s/ Sean Murphy Name: Sean Murphy Title: Managing Director S-6

Page 381
LEHMAN COMMERCIAL PAPER INC., as Lender By: /s/ Laurie Perper Name: Laurie Perper Title: Senior Vice President S-7

Page 382
LEHMAN BROTHERS INC., as Joint Lead Arranger and Joint Bookrunner By: /s/ Laurie Perper Name: Laurie Perper Title: Senior Vice President S-8

Page 383
HSBC BANK USA, NATIONAL ASSOCIATION, as Lender By: /s/ Martin Haythorne Name: Martin Haythorne Title: Managing Director S-9

Page 384
HSBC SECURITIES (USA) INC., As Joint Lead Arranger and Bookrunner By: /s/ Michael McGovern Name: Michael McGovern Title: Managing Director S-10

Page 385
GOLDMAN SACHS CREDIT PARTNERS L.P., as Joint Lead Arranger and Bookrunner and a Lender By: /s/ Walter A. Jackson Name: Walt Jackson Title: Authorized Signatory S-11

Page 386
MERRILL LYNCH CAPITAL CORPORATION, as Lender By: /s/ Arminee Bowler Name: Arminee Bowler Title: Vice President S-12

Page 387
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Joint Lead Arranger and Bookrunner By: /s/ Stephanie Vallillo Name: Stephanie Vallillo Title: Vice President S-13

Page 388
DOMINANT PROCESSING TRUST By: Wilmington Trust Company, not in its individual capacity, but solely as owner trustee under the Trust Agreement dated September 26, 2007 By: /s/ Joseph B. Feil Name: Joseph B. Feil Title: Assistant Vice President S-14

Page 389
...) 1. PURPOSE OF THE PLAN. The First Data Corporation Senior Executive Incentive Plan (the "Plan") is hereby amended and restated effective January 1, 2008 by the Compensation and Benefits Committee of the Board of Directors of First Data Corporation (the "Company"). The Plan is designed to encourage...

Page 390
..." means an incentive compensation award paid to a Participant pursuant to the Plan. 2.5 "Participant" means the Company's Chief Executive Officer and any executive officer of the Company who reports directly to the Company's Chief Executive Officer and who is identified as eligible to participate...

Page 391
... Section 162(m) of the Internal Revenue Code of 1986, as amended. 7. TERMINATION OF EMPLOYMENT. Unless otherwise determined by the Committee, a Participant whose employment in his current position with the Company terminates for any reason prior to the end of a Plan Year shall not be entitled to...

Page 392
... GOVERNING LAW. All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the State of Delaware. 10. AMENDMENT AND TERMINATION. The Plan may be amended or terminated at any time and for any reason by the Committee. The Committee...

Page 393
...2005 by First Data Corporation, a Delaware corporation ("FDC"), to enable FDC to offer a form of income protection to its Eligible Executives in the event their employment with the Company is involuntarily terminated other than for Cause. The Policy was also intended to secure for the benefit of the...

Page 394
... have the meaning ascribed to it in the 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates (the "Option Plan") or any Stock Option Agreement awarding stock options thereunder to which the Eligible Executive is a party. (iv) "Change in Control" shall have the...

Page 395
... Eligible Executives receiving Severance Benefits under this Policy are not eligible to continue contributions to the Company's qualified retirement plans or nonqualified deferred compensation program. (iii) Incentive Awards. If an Eligible Executive's employment with the Company is terminated after...

Page 396
...cash payments; (ii) cancellation of accelerated vesting of equity awards; and (iii) reduction of employee benefits. If acceleration of vesting of compensation from an Eligible Executive's equity awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date...

Page 397
... Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Eligible Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority...

Page 398
... offered by the Company from any Company customer, not to advise any entity to cancel or limit its business with the Company, not to recruit, solicit, or encourage any employee to leave their employment with the Company, not to disclose any of Company's trade secrets or confidential information...

Page 399
... any time in its sole discretion, provided, however, that during the period commencing on the Closing and ending on the 36 month anniversary of a Change in Control (other than the Merger), the Company shall not amend or terminate this Policy without the consent of each affected Eligible Executive. 7

Page 400
... if an executive is informed that he or she is not eligible for benefits under this Policy, the executive (or his or her legal representative) may file a written claim for benefits with the Company's senior human resources executive or such other officer or body designated by the Committee for this...

Page 401
... Information About The Policy And Benefits The executive may examine, without charge, at the plan administrator's office and at other specified locations such as worksites, all documents governing the plan and a copy of the latest annual report (Form 5500 Series) filed with the U.S. Department...

Page 402
... Policy should contact the plan administrator. If an executive has any questions about this statement or about his or her rights under ERISA, or if the executive needs assistance in obtaining documents from the plan administrator, he or she should contact the nearest office of the Employee Benefits...

Page 403
... Policy Sponsor First Data Corporation 12500 E. Belford Avenue Englewood, CO 80112 Plan Administrator Compensation and Benefits Committee of the Board of Directors c/o First Data Corporation Office of the General Counsel 10825 Farnam Dr., C-12 Omaha, NE 68154 Agent for Service of Legal Process First...

Page 404
APPENDIX A David Bailis Peter Boucher David Dibble Ed Labry David Money David Treinen Kim Patmore Pamela Patsley Thomas R. Bell, Jr. Grace Chen Trent David Yates Michael Cappellas 12

Page 405
..., taxes, depreciation and amortization, subject to adjustment by the Committee, as permitted under the First Data Corporation Senior Executive Incentive Plan. From time to time, the Company's executive officers receive certain perquisites and personal benefits that may include personal use of the...

Page 406
Exhibit 12 FIRST DATA CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Successor Period from September 25 through December 31, (in millions) 2007 Period from January 1 through September 24, 2007 2006 Predecessor Years Ended December 31, 2005 2004 2003 Earnings: Income (loss) before ...

Page 407
.... Cashcard Australia Limited CESI Holdings, Inc. Chase Alliance Partners, L.P. Chase Merchant Services, L.L.C. Chase Paymentech Solutions Chase Paymentech Solutions, LLC CIFS Corporation CIFS LLC ClearCheck Payment Solutions, LLC Concord Computing Corporation Concord Corporate Services, Inc. Concord...

Page 408
... (Acquisitions) Pty Limited FDC International Inc. FDC Offer Corporation FDFS Holdings, LLC FDGS Holdings General Partner II, LLC FDGS Holdings, LLC FDGS Holdings, LP FDI Merchant Services Holding (Netherlands) BV FDMS Mexico Holdings Inc. FDMS Partner, Inc. FDR (First Data Resources) Europe...

Page 409
... First Data Latin America Inc. First Data Latvia First Data Lietuva First Data Loan Company, Canada First Data (Mauritius) Holding Company First Data Merchant Services Corporation First Data Merchant Services MÃ©xico, S. de R.L. de C.V. First Data Merchant Services Northeast, LLC First Data Merchant...

Page 410
...d.o.o. First Data (Singapore) Pte Ltd. First Data Slovakia, a.s. First Data Solutions L.L.C. First Data Spain Holdings First Data Technologies, Inc. First Data Trust Company, LLC First Data UK LLP First Data Uruguay SA First Data Voice Services First Data, L.L.C. First Data/Paymentech Canada Partner...

Page 411
.... Merchant Solutions Sdn Bhd Money Network Financial, LLC National Payment Systems Inc. New Payment Services, Inc. Northern Gaming Systems Pty. Limited NPSF Corporation Omnipay Limited PayCan Holdings, Inc. Paycare Limited Paymentech Canada Debit, Inc. Paymentech Employee Resources, LLC Paymentech...

Page 412
...Joint Credit Card Company Limited TRS Recovery Services, Inc. Transaction Solutions Holdings, Inc. Transaction Solutions, LLC Unibex India Private Limited Unibex, LLC Unified Merchant Services Unified Network Payment Solutions Unified Partner, Inc. USPI - Canada Inc. ValueLink, LLC Virtual Financial...

Page 413
... OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have issued our report dated March 10, 2008, accompanying the combined financial statements of Chase Paymentech included in the Annual Report of First Data Corporation on Form 10-K for the year ended December 31, 2007. /s/ GRANT THORNTON LLP...

Page 414
... OF CHIEF EXECUTIVE OFFICER I, Michael D. Capellas, Chief Executive Officer of First Data Corporation, certify that: 1. I have reviewed this Annual Report on Form 10-K of First Data Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or...

Page 415
... OF CHIEF FINANCIAL OFFICER I, Kimberly S. Patmore, Chief Financial Officer of First Data Corporation, certify that: 1. I have reviewed this Annual Report on Form 10-K of First Data Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or...

Page 416
...CHIEF EXECUTIVE OFFICER The certification set forth below is being submitted in connection with the Annual Report of First Data Corporation on Form 10-K for the period ended December 31, 2007 (the "Report") for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange...

Page 417
...CHIEF FINANCIAL OFFICER The certification set forth below is being submitted in connection with the Annual Report of First Data Corporation on Form 10-K for the period ended December 31, 2007 (the "Report") for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange...

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